Davlin budget relies on Dallman profits

DEANA POOLE

Thursday

Nov 27, 2008 at 12:01 AMNov 27, 2008 at 9:20 PM

Mirroring the recommendations of a blue-ribbon panel he assigned earlier this year to study city finances, Springfield Mayor Tim Davlin Wednesday released a proposed spending plan that largely relies on profits from the new Dallman 4 plant to keep the rest of city government running

Mirroring the recommendations of a blue-ribbon panel he assigned earlier this year to study city finances, Springfield Mayor Tim Davlin Wednesday released a proposed spending plan that largely relies on profits from the new Dallman 4 plant to keep the rest of city government running.

Davlin’s proposed $117 million budget, which excludes City Water, Light and Power, also recommends closing the two remaining library branches, increasing the telecommunications tax from 1 percent to 6 percent, eliminating through attrition a total of four positions in the police and fire departments and cutting the public works budget by $1 million.

Davlin said his spending plan averts the need for an increase in the city’s property tax rate or the sales tax. It also supports 838 employees without the need for layoffs, he said.

But his plan probably will face resistance from aldermen. Many already have said they won’t support any kind of a tax increase. Others expected deeper cuts. Public hearings on the proposed budget probably won’t be held until next year.

“I’m going to assume that there will be some dissention using the blue-ribbon panel’s suggestion at least as a whole product,” Ward 7 Ald. Debbie Cimarossa said. “We have to keep in mind that the suggestions are very viable suggestions, but I want to see what else has been cut before I propose an increase in a tax.”

Higher costs of pensions, salaries, health insurance and gasoline have left the city with a projected $12.6 million shortfall for the next fiscal year, which begins March 1.

Davlin’s proposed budget significantly increases what the city charges CWLP for electric sales made to other utilities and users outside Springfield. Doing so would add an additional $5.9 million to the city’s coffers next budget year and $9 million a year beyond that. The amount is projected to be smaller next year because Dallman 4 will only be operational for part of the year.

The city-owned, coal-fired plant, which will cost $542 million, is expected to rake in millions of dollars annually from selling surplus power.

The city already charges the utility for electric and water revenues it receives to compensate for lost tax revenue — 2.67 percent on electric sales made within the city and 3.5 percent on gross sales made outside it. Under the committee’s proposal, the city would charge 30 percent of net sales made outside Springfield. Payments made on sales inside the city wouldn’t change.
Davlin’s spending plan also recommends the following:

*Hiking the city’s telecommunications tax from 1 percent to 6 percent, the maximum allowed by state law. The tax is applied to all phone bills, including cell phones. The 5 percentage point increase would generate an estimated $4 million a year.

The money would be used to pay for Lincoln Library, which is currently funded through property taxes. The mayor’s blue-ribbon committee noted that the cities of Normal, Champaign, Urbana, Peoria, Decatur and Rockford have a telecommunications tax of 6 percent.

For Springfield phone users, the increase would amount to an additional $2.50 per month for a $50 phone bill.

*Shutting down the library’s two branches — on the southeast and west sides — which would save about $370,000 per year. There are eight employees at the branches, some who work part time. Davlin said if aldermen agree to shut down the branches, the city would try to move the employees into vacant positions at the main downtown library.

“Let’s make it perfectly clear: I would love to keep them open,” he said. “We’ve got to decide what other services do we want to get rid of if we don’t.”

*Eliminating two positions in the fire department and two positions in the police department. The positions, which Davlin said can be cut through attrition, would save a combined $284,000.
Putting together a budget for the next fiscal year presents some of the same problems as this year’s did. But there’s little financial cushion to fall back on because the city is spending more than it brings in.

Since 2003, the Davlin administration had built up a considerable safety net within the city’s general fund. But the city has dipped into those savings.

Davlin said his plan would help the city build its savings back up, and that the city should be able to end the year with about $10 million in its “fund balance,” which he said is the amount needed to keep the city operating in the black.

The city largely blames police and fire pensions for its financial troubles. State-required pension sweeteners and out-of-whack actuarial estimates have created nearly $115 million in unfunded pension debt for Springfield.

Davlin appointed a 13-member committee in February to address the police and fire pension issue. The committee’s report, which was released last week, represented a recommended 10-year financial plan for the city.

Asked about the mayor’s budget, Ward 1 Ald. Frank Edwards, referring to rate relief the new power plant was supposed to provide, said Wednesday: “We need to do something fundamentally different with government. If we pass this budget, four or five years down the road, what does the taxpayer have to look forward to?

“What are we getting rid of? We’re not getting rid of anything. We’re just piling on more,” Edwards said. “I think what we’re going to have to have is an in-depth discussion among city council members and the mayor’s administration about where do we go from here.”

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.

Information

Original content available for non-commercial use under a Creative Commons license, except where noted.
The State Journal-Register ~ Street address: One Copley Plaza (corner of Ninth Street and Capitol Avenue), Springfield, ILMailing address: The State Journal-Register, P.O. Box 219, Springfield, IL 62705-0219 ~ Privacy Policy ~ Terms Of Service